IR Magazine hears from Nossa Data about how companies can use technology in their ESG reporting
As investor and stakeholder interest in ESG issues continues to grow, so too does the need for accurate and relevant ESG data. But collecting and reporting ESG data is often a strenuous process for corporates, requiring significant resources, time and expertise. Fortunately, technology has emerged as a valuable solution to these challenges, offering new and innovative ways to collect, analyze and report on ESG data.
In particular, technology is helping with ESG reporting in the following ways:
- ESG data collection
- Data analysis and visualization
- ESG reporting and disclosure
- Integration across business functions
- Competitive positioning.
1. ESG data collection
One of the biggest challenges companies face in collecting ESG data is ensuring the accuracy and completeness of ever-growing data. Traditional methods have become expensive and time-consuming and, as a result, are not fit for purpose. Tools like Word, Excel and email are often used for data collection, leading to inconsistencies, errors and duplicate work.
Through the use of technology, companies can collect data much more efficiently. Digital ESG tools, such as Nossa Data, offer a centralized database for data gathering that facilitates easy access, analysis and sharing. This not only saves time, but also mitigates the likelihood of errors and inconsistencies, helping to enhance data accuracy and reliability.
2. Data analysis and visualization
Collecting ESG data is only half the battle; the data must then be analyzed and presented in a meaningful and actionable manner. As opposed to using traditional methods such as compiling PDFs and spreadsheets, which present limitations such as constant version control and manual data entry, an ESG-specific software delivers benefits in the form of automatic data retrieval and engaging reports.
Data analysis and visualization tools help companies assess materiality, identify trends and monitor progress over time. These tools enable ESG data to be shared in a more accessible and understandable way, ultimately helping stakeholders to understand the company’s performance and decision-making.
3. ESG reporting and disclosure
Having obtained and visualized the data, reporting and disclosure are critical components of ESG reporting but the bureaucracy and inefficient use of time often associated with these activities can be a challenge. ESG reporting software solutions, such as that provided by Nossa Data, help to streamline these processes.
Nossa Data’s ESG reporting software helps companies automate their ESG reporting and disclosure processes, reducing the time and resources needed to produce reports. Used by multinationals such as Vodafone and in partnership with ShareAction’s Workforce Disclosure Initiative (WDI), the platform helps companies track and monitor their historical ESG performance, identify areas of improvement and communicate performances effectively to stakeholders. Nossa Data’s reporting capabilities include customizable reports and dynamic templates, ensuring that company data is consistent across relevant ESG frameworks and standards, such as those of the GRI, SASB, CDP and TCFD.
4. Integration across business functions
Although the ESG reporting process is typically overseen by sustainability departments, companies are realizing the importance of having a cross-functional set-up and including members from various business functions. One way companies can integrate ESG across business functions is by setting up a centralized data governance system, enabling effective collection and management of ESG data from different departments.
By integrating ESG across business functions, companies can ensure their ESG data is consistent, accurate and complete. Given recent sustainability regulations and initiatives, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), internal collaboration can help companies improve their ESG performance and align their ESG goals with their broader business goals.
5. Competitive positioning
Despite cross-functional collaboration, challenges still exist when accessing both internally and externally available data: employees who have ESG-related tasks assigned to them end up leaving the company, duplicate entries exist and navigating competitors’ ESG reports becomes time-consuming. With the rise of ESG investing, presenting all available data helps differentiate between peers.
Nossa Data’s materiality mapping feature uses AI to analyze hundreds of annual reports and compare company performance across key material ESG topics, helping prioritize the most important ESG issues for their specific industry and business. Companies consequently identify potential areas of improvement, or even establish opportunities for partnerships and collaborations with other companies and organizations working toward similar ESG goals.
Technology will continue to be a powerful tool in ESG reporting processes. By leveraging digital tools and ESG software solutions, companies save time, reduce errors and communicate ESG performance more effectively to stakeholders. In addition, technology helps companies gain a competitive advantage by identifying areas for improvement. As ESG considerations continue to play a more significant role in business decisions, leveraging technology will be critical for companies to stay competitive and meet stakeholder expectations.
This content is provided by Nossa Data and did not involve IR Magazine journalists. For further information on Nossa Data please click here.